Monday, August 6, 2018

US influence on the global economy has been gradually falling, and emerging economies like China and India can overtake the US as global leaders, according to Marc Faber, editor and publisher of The Gloom, Boom & Doom Report.

“The US as an empire against the rest of the world peaked in 1950s or 1960s. Then, there have been other countries that have become more powerful, in particular China and now increasingly India. The US empire and its influence on the world is diminishing and has been diminishing for quite some time,” he told RT. The trade war may accelerate this “mutation” in the global economic balance “with other countries becoming more important and the US less important,”Faber said.

According to Faber, the US is likely to be the biggest loser from the trade war it started. “The winners in a real trade war would be everyone except the US. The Europeans would trade more with Asia, and the Asians would trade more with Europe than the US. There would be more trade between the emerging economies and China and vice versa,” Faber said.

Another winner from the trade would be Russia since China would buy more resources from the country, while Moscow would buy more from Beijing, he said.

The US stock market has thus far ignored the news about the global trade war, Faber notes. “But if there is trade war, it is not good for the global economic growth. The global economy is slowing down already. I think it would be a big mistake to go ahead with the trade war.”

The countries most exposed to the trade war in emerging markets are Brazil, Turkey, and Argentina, due to their fiscal problems, growing deficits, and weak currencies amid large amounts of foreign debt, Faber said.

With the global economy financed by soaring debt since the last global crisis of 2008-2009 another recession is likely to come, but its shape is not yet known, according to the investor.

Despite the recent strength of the US dollar, especially against the currencies of emerging economies, Faber says the trend will not continue in the long run. He says the best way to protect individual investments in times of turmoil is to diversify the portfolio with cash, bonds, precious metals, and real estate.

Thursday, August 2, 2018

Marc Faber, editor and publisher of The Gloom, Boom & Doom Report, said he would not be surprised if Indian markets corrected 20% from current levels, but did not give a timeline for such a correction. In a phone interview from Chiang Mai, Thailand, the Swiss investor expressed concerns over the trade war, and said it is not beneficial to anyone.

What do you think could be the repercussions of global trade war on the world economy and markets?

There is less or hardly any growth in Europe. The Chinese economy has been slowing down, as well as other Asian economies. The US stock market by any measure is highly priced.

We have recessions in Argentina, Brazil and Turkey. We have currency weaknesses around the globe in dollar terms, which is a sign of monetary tightening, and now we have also this so-called trade war. Some people may suffer more, and some less but a trade war cannot be beneficial for anyone. In general, it is not a positive for the global economy or the financial markets.

Indian markets recorded new high today (Thursday). Do you think the rally in India is sustainable or do you think there is a correction in the offing for benchmark equity indices?

When (Indian) market hit a high earlier this year in January, my sense was that high would be an important one, but we made a new high.

Let’s put it this way, when I travel around the world and I visit financial institutions, first time India is really a subject. For the first time, investors think that India has an experience and a meaningful fundamental improvement due to the Modi government. They are not sure if it is the right time to invest now in India. Over the next 10 years, we want to have some money in India, regardless.

If you look at the S&P (500), and Indian stock market over the next 10 years, you will make more money in India than American shares. This has been my view for the last three years, and this remains my view.

Of course, if the global stock markets are going down— all the major markets, except India are going down. When everything is weak, and India is still strong, I will be reluctant to buy the market which is strong. It (rally) may last a little bit longer but it doesn’t mean it is good value. Valuations are not attractive other than a few exceptions.

How do you see it faring from here?

The bull market in India started in late 2015, We have seen a big move, I wouldn’t be surprised if there is a 20% correction. I cannot give you a date though.

If you put all your money now in Indian stocks, the reward in my opinion will not be great, as there are internal and external risks.

Sunday, July 29, 2018

It's unfortunate that "hate speech" arbitrarily defined and dictated by the left is suppressing free speech and the search for objective truth. "Thank God white people populated America," uttered by Marc might have been said in a less offensive manner, but to remove the truth-seeking thoughts of a freedom-loving, non-racist intellectual of Dr. Faber's stature is unconscionable and ultimately destructive, most of all to minorities.

We are delighted to have Dr. Faber with us to discuss the global markets as he once did on all major business channels, at Barron's, and other mainstream print media. We ask Marc about Trump's economic policies, global monetary policy, stocks, bonds and precious metals, geopolitics, dollar hegemony, the Petro yuan, and much more.

Thursday, July 26, 2018

Eric King: “I know you’ve had some issues coming into the United States, where you’ve been in an airport where they have taken you to the side and put you in a room (Dr. Faber laughs), which seems preposterous. But this move to more of a police state in the West, does that have you concerned?”

Dr. Marc Faber: “Well, that is another possibility, that we go more to a fascist regime rather than to socialism. That is a possibility that we need to entertain. And it is very clear to me, having grown up in the 1950s and 1960s, that today there is much more control of what you and I do. It’s stricter and more unpleasant…

We have far more regulations, far more laws, that actually are very negative for the small businessman, from which actually the economy grows the most. That also has a negative impact on growth. I would say whatever scenario you look at, the only scenario that could boost growth, briefly, substantially, would be war.”

Saturday, July 21, 2018

A big difference between the market today and that of the 1987 crash is unfunded pensions. Renowned investor Dr. Marc Faber, who holds a PhD in economics, says, “The unfunded liabilities have gone up. They did not go down...

Friday, July 13, 2018

"The rupee will be at these levels, maybe a rupee here or there. I don’t see rupee going to 75-76 to the dollar and there is no reason why it should. We have $400 billion of reserves and we are the most investible country.

We have never had any defaults, our track record is tremendous compared to other emerging markets and our levels of debt are nothing as compared to China. So on all those parameters, I think India is doing well and will do well.

Always remember, Marc Faber, one of the gurus of emerging markets, he always said one thing, the locals know best."

Tuesday, July 10, 2018

One of the staggering developments from the mad money world of stock markets is that US stocks rose overnight, with the Dow Jones index up over 180 points, as the deadline to President Trump’s trade war looms today. And what’s even more surprising is that some professionals reckon the market has priced in the effects of a trade war!

Gee I hope they’re right, but I don’t know how I or anyone could really test that.

This confidence that market experts know what lies ahead was captured by this from Jeremy Klein, chief market strategist at FBN Securities: “Any news we get on trade in the short term will be neutral or good,” he said. “We already know all the bad news that's out there on this issue.” (CNBC)

What he’s saying is that experts on the significant companies affected by a tit-for-tat trade war have worked out the profit effects of tariffs and then changed their valuation on that company. But those calculations operate off assumptions that might end up being wrong!

This is how the trade war should begin, with a U.S. Trade Representative statement saying tariffs on $34 billion of Chinese goods will take effect at 12:01 a.m. in Washington. Then China will return fire immediately. The assumption is that China will hit back with equal force. But what if they don’t, instead hitting harder than expected and on industries that were not expected to be affected?

All’s fair in love and war. And you can’t expect that a trade war will be fought out following some gentlemanly rules of engagement. Mind you, I hope it is, and I also hope the market experts have calculated the effects accurately. But I always argue that hope is not a strategy upon which you can build wealth in the stock market!

What worries me about this complacency on the trade war is that it comes when the doomsday drones are ganging up to ramp their warnings about an imminent recession and stock market sell off.

You shouldn’t be surprised about this, as since the end of the GFC this mob has tipped a Great Depression, countless market crashes and some have even had the Dow Jones plummeting below 10,000 while it’s now over 24,300!

Donald Trump has been seen as the trigger, with this one from Bloomberg showing how the negative nervous Nellies have been scaring us for some time: "Citigroup: A Trump Victory in November Could Cause a Global Recession!" (Bloomberg Financial News headline, August 2016)

And then this one: "A President Trump Could Destroy the World Economy!” (Washington Post editorial, October 2016).

Then there have been the likes of Harry Dent and Marc Faber who have been tipping a market Armageddon for at least three years, probably longer. These guys will get it right one day, after being wrong for a long time. And this trade war could be the trigger for them being free to boast about their insights.

All this comes at a time when investor surveys show that those playing the stock market are losing confidence. And some well-known fund managers have expressed their concerns about being long stocks, with the likes of Bridgewater Associates’ Ray Dalio saying he’s getting out of financial assets.

“It’s a classical late cycle story. So, when I was here last time, I said we were long and nervous. We are no longer long, we are increasingly nervous about this,” Roelof Salomons, chief strategist at Kempen Capital Management, told CNBC’s “Squawk Box Europe” on Thursday.

A late cycle represents an economy that has been growing, but is poised to fall into a recession, amid rising interest rates, lower profit margins and other negative economic headwinds.

And a trade war could be a cyclone, while the experts are treating it more like a zephyr. I’m gambling that these guys and their assessments are right because I think the current economic and corporate profitability stories are so strong. But I know I’m gambling.

If you can’t afford to gamble and see stock prices slide, then you might have to play it safer than me. But let’s all pray that this trade war doesn’t prove some Trump-haters right.

Friday, July 6, 2018

Dr. Marc Faber was born in Zurich, Switzerland and obtained a PhD in Economics at the University of Zurich. Between 1970 and 1978, Dr. Faber worked for White Weld & Company Limited in New York, Zurich and Hong Kong. From 1978 to February 1990, he was the Managing Director of Drexel Burnham Lambert (HK) Ltd. In 1990, he set up his own business, Marc Faber Limited which acts as an investment advisor and fund manager.

Dr. Faber publishes a widely read monthly investment newsletter, “The Gloom Boom & Doom Report,” which highlights unusual investment opportunities, and is the author of several books including Tomorrow’s Gold: Asia’s age of discovery which was a best seller on Amazon. Dr. Faber is known for his “contrarian” investment approach and charismatic personality. He became infamous after calling the 1987 crash in US equities.

Nomi Prins is an American author, journalist, and Senior Fellow at Demos. She has worked as a managing director at Goldman-Sachs and as a Senior Managing Director at Bear Stearns, as well as having worked as a senior strategist at Lehman Brothers and analyst at the Chase Manhattan Bank.

Prins is known for her books All the Presidents’ Bankers: The Hidden Alliances that Drive American Power and Collusion: How Central Bankers Rigged the World.

Wednesday, June 27, 2018

Renown Swiss investor and publisher of "The Gloom, Boom and Doom Report" Dr. Marc Faber discusses the global markets, housing and bond bubbles, central bank manipulation, gold, Trump, the petroyuan, the New Silk Road and what a potential conflict between the U.S. and China might look like as old empires die and new ones are born.

"I think it may very well come from a credit event. Or, it may come from the disclosure of a major fraud. Or, it may come because interest rates start to go up," he said.

For now, it appears the rally isn't cracking. The S&P 500 has had 36 record closes this year. The Dow has done even better.

"In 2009 when stocks bottomed out, I can tell you that not many people saw why stocks would go up," Faber said. "Now it's the opposite. The sky is clear. Corporate profits have been expanding — they're good. Interest rates are low, but valuations are very high."

Monday, June 18, 2018

My co-host and I interview Dr. Marc Faber to discuss his views on the global economy, emerging markets, and the trade war.

An underlooked risk Marc mentions lies in the voting patterns of milennials.

Marc also tells us what his biggest trading mistake was and his unusual work schedule.

Marc Faber joins us as a special guest on this show, and it makes for a great conversation on markets, the economy, why the rent is too high in California, his advice for milennials, and his unusual sleep schedule. We also discuss the US-China trade negotiations, its impact on other emerging market economies, and what catalysts could possibly cause the market momentum to shift directions.